The big push for organizations to digitally transform their businesses has entered big spaces: Warehouses. Companies are driven mainly by increased e-commerce demands and feel competitive pressure to optimize their warehouse operations. They are increasingly investing in warehouse management systems, cloud applications, AI/ML-driven platforms and drone technologies to enhance their facilities management capabilities and remain competitive.
As Michael Brandl, EVP operations software EMEA at Körber Business Area Supply Chain, explained, modern supply chains face plenty of complexities. “These include sudden delivery bottlenecks, rising customer expectations, ever-larger product ranges, hybrid fulfillment concepts and labor shortages. This leads to significantly higher demands on efficiency and transparency in logistics operations, for which digitized strategies are becoming indispensable also to tap new potentials of data use and analysis,” he said.
WMS platforms help organizations execute those strategies, specifically using IoT and AI/ML effectively. These are gaining popularity for their real-time data collection and analytics capabilities, predictive analytics, and automated decision-making. These systems help companies improve efficiency, reduce costs and improve customer experiences.
The market research firm The Insight Partners predicts in its report Warehouse Management System Market Size, Share, Growth, Trends and Global Forecast to 2030 that the WMS market will grow from $14 billion in 2022 to $51 billion by 2030 — an annual growth rate of 17%.
It’s a Global Trend
With WMS market growth being global, it’s for differing reasons within different regions. Much of the growth in North America, according to The Insight Partners, will be due to the increased use of business-to-consumer drop-shipping. This will help drive efficient, fast, and affordable orders out to customers. “The majority of the e-commerce giants in the region have been striving to improve their inventory turnover ratio. Companies are adopting drop shipping as a core process to achieve the desired ratio. The trend is projected to increase the demand for WMS,” the research firm said.
While growth in the APAC region is anticipated due to the expected building of new warehouses in the area, because of the rapid investment in new warehouses, the APAC region is expected to focus on strengthening its logistics infrastructure for better and more efficient workflow management. Due to a rise in preference for e-commerce, disruptions in the supply chain and high customer demand, there is a shortage of space in the region. “Further, many retailers across the Asia Pacific have had to rethink their entire supply chains to keep up with the demand. Across India, Singapore, Hong Kong, Japan, and Australia, the logistics space has become increasingly hot property as retail and logistics firms secure the sites they need in order to keep up with growing delivery volumes and ensure their networks can best serve a diverse customer base,” The Insights Partners continued.
WMS Deployments Moving to the Cloud
In late 2021, supply chain and omnichannel commerce software provider Manhattan Associates announced that British grocer, Asda, had chosen Manhattan Active Warehouse Management system for its logistics network in the UK. According to the two companies, Manhattan Active Warehouse Management will help Asda to efficiently distribute its stock, fulfill online orders and manage resources.
By moving to a cloud-based system, Asda hopes it will speed up its ability to meet changing market demands and more effectively scale. Jon Parry, vice president at Asda logistics services, said consumer expectations have significantly changed over the last 18 months, and Asda needed to evolve its technology to drive greater logistics efficiencies.
A major software drinks, beers, spirits and wines wholesaler in the UK, LWC Drinks, recently announced it completed a £7 million project on a 58,000 sq ft distribution site. Its new warehouse management system will help the company improve inventory management and forecasting. The investment comes after significant growth and investments during and after the Covid-19 pandemic.
“We’re fortunate enough to see a growth in turnover over the last year and identified a need to increase our storage capacity to meet customer demands and drive efficiencies through the business and for our customers. We have added 350,000 square feet of distribution space over the last year alone,” said LWC Drinks’ managing director, Ebrahim Mukadam, in a statement earlier this year.
Also earlier this year, REWE International AG chose Körber Warehouse Management System for 40 European locations. REWE chose K.Motion WMS to help improve flexibility and to optimize its warehouse processes. According to REWE.
The rollout will occur in two stages. The first and pilot phase is planned to run until mid-2025. During this phase, Körber will implement the WMS at five locations for cross-docking and dry and fresh assortments. Concurrently, according to the companies, REWE will integrate Körber Warehouse Management System into its existing ERP systems. The initiative is expected to be completed by 2028 after implementing an additional 35 REWE locations.
“The decisive factor for us was the support from a strong partner like Körber with proven experience on an international level. The solution moreover allows our supply chain to meet not just the changing retail requirements of today – but also those lying ahead,” said Manfred Mülleder, project lead WMS at REWE International AG, in a statement.
Warehouse Drones to Improve Safety and Accuracy
As organizations increasingly turn to drones to add more intelligence and efficiency to their warehouse management systems. For instance, Maersk North America is turning to inventory drones by Verity, which will help provide a safer option for managing inventory from high places.
“We wanted to deploy a safer, more accurate, data-driven inventory solution,” said Erez Agmoni, senior vice president of innovation and strategic growth for Maersk North America. “Verity’s system has delivered data accuracy, safety and speed which makes our warehouse management system stronger, faster and more effective for customer decision-making,” he said.
According to Maersk, Verity’s warehouse drones navigate pallet to pallet, collecting inventory data by scanning barcodes at any height using onboard, high-resolution cameras. The system requires one day of operator training. The electric-powered drones return to the battery charging pad when necessary, operating on nights or weekends and without overhead lighting turned on. The drones take photos of SKUs on pallets to identify inventory errors, such as missing or misplaced pallets.
Once the data is collected, the system compares the findings with data stored in the warehouse management system (WMS). Then it distills that information into critical insights delivered directly to users via the user dashboard. The results are cloud-based and shareable, providing actionable warehouse data that offers better analytics for supply chain leaders.
We view the Verity solution as an essential differentiator to make our customers more competitive through higher quality, faster inventory data,” added Agmoni.